NEW YORK (dpa-AFX) – The US stock exchanges are likely to start trading on Tuesday with some heavy losses. The attempt to recover at the start of the week, which followed the setback on Friday, has ended for the time being. The focus is once again on the trade dispute between the USA and China, which is once again being fought with tougher conditions. On top of that, the reporting season started with quarterly figures from major US banks.
Around an hour before the start of trading, the broker IG estimated the leading index Dow Jones Industrial 0.7 percent lower to 45,755 points. The technology-heavy selection index NASDAQ 100 is expected to be significantly lower at minus 1.1 percent at 24,480 points.
Not only did mutual port fees come into force that day in view of the customs war, but China also emphasized that it wanted to fight the trade dispute to the end. “Even if it’s just port fees on cargo ships that travel between the USA and China and are now levied on both sides – it’s a small but further escalation level,” wrote capital market strategist Jürgen Molnar from Robomarkets. If the conflict is actually fought to the end, “this should not leave its mark on the world’s financial markets.” The topic is therefore back on investors’ agendas.
Accordingly, the “magnificent seven” were weak premarket, i.e. the shares of the seven most important US tech companies NVIDIA, Microsoft, Apple, Alphabet (Alphabet A (ex Google)), Amazon, Meta (Meta Platforms (ex Facebook)) and Tesla.
Cryptocurrency-related stocks also fell as Bitcoin fell sharply following renewed trade tensions in the world’s two largest economies. Coinbase, Riot Platforms and Strategy (formerly Microstrategy) (Strategy (ex MicroStrategy)) fell premarket, while shares of companies focused on critical metals such as rare earths rose sharply. Critical metals, for example, jumped 34 percent.
However, the shares of JPMorgan (JPMorgan ChaseCo), Wells Fargo (Wells FargoCo), Goldman Sachs and Citigroup, which presented their quarterly reports, were particularly in focus. JPMorgan fluctuated between moderate profits and losses in the premarket, as this major bank increased its profits more significantly than expected in the third quarter, but disappointed with its net interest income. The Citigroup papers also showed little change. Wells Fargo, on the other hand, rose by almost 3 percent premarket after a surprisingly strong quarterly profit. At the same time, Goldman Sachs fell by almost 3 percent.
Johnson & Johnson (JohnsonJohnson) gave up its initial pre-market profits following its quarterly report. After a surprisingly good third quarter, the pharmaceutical and consumer goods manufacturer set its goals higher again. The group also announced the spin-off of its orthopedics business.
The fact that the Canadian bank RBC upgraded T-Mobile US to “Outperform” resulted in a premarket gain of 1.7 percent. Analyst Jonathan Atkin expects the Deutsche Telekom subsidiary (Deutsche Telekom) to experience stronger customer growth than U.S. competitors in the short term and capture value from the acquisition of USM in the medium term./ck/bek/jha/